The key to the debate for hospitals is how much any reform bill will reduce the ranks of the uninsured in return for the $155 billion over 10 years in future Medicare updates that the industry agreed to forgo in a deal with the Obama administration, Pollack said. One Wall Street estimate was that hospitals would see a benefit of $214 billion to $236 billion over 10 years from healthcare reform, Pollack said, or a net gain of $59 billion to $81 billion, but the AHA estimates a gain of $171 billion, or $16 billion net. If the final proposal does less to cover the uninsured, then the providers' Medicare givebacks should be less, too, Pollack said.
On the public option, Pollack said, the AHA prefers the Senate Finance Committee's proposal, which would set up not-for-profit cooperatives and allow states to opt out of them. Pollack lamented that tort reform is highly unlikely to be part of any reform bill that can make it through Congress. “The votes aren't there to do tort reform the way that we would prefer it,” Pollack said, citing California's approach as a good model. End-of-life care also is being ignored in the debate, he said.
Ultimately, whatever shape healthcare reform takes, Pollack said, it beats the alternative: A new version of the Medicare cuts in 1997's Balanced Budget Act, but without healthcare reform's sweetener of more coverage.
In contrast, Scully questioned how healthcare reform could essentially leave hospitals and 70% of the people covered by employer-sponsored plans untouched and really deserve the name “healthcare reform.” Scully noted that the federal government has done “nothing tough” on hospitals for seven or eight years. He left unsaid that that period included his time as CMS administrator. The bills that have been approved by various congressional committees change nothing for large employer-sponsored plans governed by the Employee Retirement Income Security Act.
Scully serves as an adviser to the Rolling Hills Group, an effort by providers, insurers and large employers in Tennessee to craft a consensus approach to universal health insurance within 10 years that relies on the money already in the healthcare system. The group's proposal would cap the tax exemption for health insurance and provide it to individuals as well as employers, among many other changes. The cap on the tax exemption raises the revenue needed to subsidize premiums for those who don't receive coverage from their employers and don't qualify for Medicaid, and it should also help deal with medical inflation, too, the group contends.
“Basic healthcare insurance should be tax-subsidized,” Scully said. “Plush healthcare shouldn't.”
Such a plan, however, can't make much headway in Congress, Scully said. In the House, Democrats' fealty to labor unions, which have negotiated expensive, first-dollar health insurance plans for their members, ensures that a cap on the tax exemption is a nonstarter, Scully said. The Senate Finance Committee proposal taxes insurers for very high cost plans, but they shrink from making the cap low enough to really bite, he said. As for the Republicans, they have run off all the moderate members of the party, making it much harder to take a bipartisan approach to healthcare or much of anything else, said Scully, who self-identified as a Republican and worked for both Bush administrations and the Reagan administration.
“It's very, very, very easy to spend money,” he said. “It's very, very, very hard to raise money.”
Ideally, healthcare reform would look like the bill introduced a few years ago by Sen. Ron Wyden (D-Ore.), but that proved too radical to gain much support, Scully said, so the Rolling Hills Group suggests a 10-year phase-in of healthcare reform, to alleviate the fear of change. (A former adviser to Wyden helped craft the Rolling Hills Group proposal.)
Both Pollack and Scully said that the healthcare reform debate is far from over. Finishing by Christmas would take a miracle, Scully said. He predicted that work will continue into 2010, with the president signing a bill around March 15. Pollack offered no specific predictions, but near the end of his presentation, he simply said, “We've come a long way, but man, we still have a long way to go.”